Reference no: EM132620947
Question - You are operating your accounting firm. Your first client had the following transactions in April 20x7:
1. Borrowed $10,000 from the bank.
2. Purchased $2,250 of computer equipment for cash.
3. Paid $750 cash for this month's rent.
4. Purchased $1,500 of office supplies on credit. It is expected that these supplies will last for 3 months.
5. Billed $500 to customers for services rendered during April.
6. Paid cash for the $1,500 balance owed to the vendor from Transaction 4.
7. Collected $450 cash of the amount billed to the customer in Transaction 5
8. Sold one-half of the equipment purchased in Transaction 2 for $1,125 in cash, with no gain or loss recognized on the sale.
9. Paid $1,000 of the principal from the loan in transaction 1, along with $50 in interest.
Required - Use the four steps in the accounting cycle to analyze business transactions,
a) Identifying transactions from source documents,
b) Analyzing transactions using the accounting equation,
c) Recording the journal entry and
d) Posting the entry to the ledger to complete the following:
1. Prepare journal entries for each of the above transactions.
2. Post the journal entries to T-accounts and total the accounts.
3. From the T-accounts, create an unadjusted trial balance. List expenses in alphabetical order.